Spare UK rooms could net $A110bn a year

HOMEOWNERS in England could collectively generate STG69 billion ($A110.27 billion) a year by renting out their spare bedroom to a lodger, research shows.

Around 13.7 million bedrooms in owner-occupied households across the country are currently lying "idle", according to flat sharing website easyroommate.co.uk.

Based on current average flat share rents, these rooms could potentially generate STG5.8 billion a month or around STG69 billion a year if they were opened up to renters, the website estimated.

London home owners were found to be missing out on the biggest pool of potential rents. The capital was found to have more than four million unoccupied bedrooms which could result in rents of over STG28 billion a year if they were let out at the average monthly flat sharing rent in London of STG580.

Easyroommate based its estimates on a combination of English Housing Survey figures, its own research and average rents recorded by lettings network LSL Property Services, owner of Your Move and Reeds Rains.

Flat share rents have risen by four per cent over the last year to reach STG390 a month typically.

The website urged the Government to increase the threshold on the "rent-a-room" relief scheme, which allows people to receive up to STG4250 a year tax-free from letting out accommodation in their home. Those who earn more than the threshold must complete a tax return.

Based on average rents, home owners in London, the South East, East Anglia and the South West would go over the threshold if they rented out a room for a year, the study said.

Jonathan Moore, director of easyroommate.co.uk, said: "It's been 16 years since the current rent-a-room relief threshold was implemented.

"Increasing the threshold would tempt more owners into the market to provide much-needed accommodation to the private rental sector.

"Not only would this help ease the burden being placed on rental property, but the savings made by those renting in flat share or lodger accommodation can help build the deposit needed to climb on the sales ladder."

Separate research released from BM Solutions, the buy-to-let brand of Lloyds Banking Group, found that landlords are increasingly relying on the private rental sector to supplement their monthly income amid the squeeze on household budgets.

More than two-fifths of landlords surveyed by BM Solutions said they were using their rental income to support their immediate living costs, showing a marked shift from two years ago, when landlords tended to be mainly turning to the rental sector to top up their retirement funds.

The studies come at a time when the private rental sector is still under pressure due to strong demand from tenants who have struggled to get on the housing ladder. This in turn has been pushing up rents.

English Housing Survey figures recently showed that more households are renting their homes privately in England than living in social housing for the first time since the 1960s.

Some 17.4 per cent or 3.84 million households were living in the private rental sector last year, compared with 17.3 per cent or STG3.80 million renting from councils or housing associations.

The English Housing Survey also found an increase in the proportion of households within the private rental sector which are classed as overcrowded, meaning that the number of bedrooms is not enough to avoid some ''undesirable sharing''.

Here are the average monthly rents home-owners could generate in each region by taking on a lodger, according to easyroommate.co.uk:

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